More and more people find themselves thinking about creating up a side business while studying or working. Inspired by stories of billion dollar Instragram exits, the 4 Hour Work Week, or peers they set out and tip their toe into the pool of entrepreneurship. Most of the worlds greatest startup success stories have started this way – coding late evenings after a full day at work. This allows you to validate the crazy ideas before jumping ship full swing. I believe this kind of part-time entrepreneurship, where is aim is test for scalability and market fit, is healthy and often a necessary step to avoid disasters.
However, there exists another kind of part-time entrepreneurship, where your startup becomes a hobby instead of a business. You don’t necessarily always plan to create a hobby-startup. Yet it’s easy to fall prey in a situation where other priorities seem to take over, time is limited and the you’re not extremely passionate about your own idea. Alternatively, you’re looking for a quick buck with minimum work, trying to create a ‘muse’, passive income cashflow that doesn’t require too much commitment.
How can we recognise the hobby-entrepreneurs? First of all, they don’t plan to ever work full-time for their own startup. Even in a best case scenario where market fit is found, they’ll hire a manager from outside to handle the growth. Secondly, they’ll avoid accountability. In order to preserve their “freedom” they’ll resist taking mentors or investors, who might push them to prioritize the startup over other things. In addition, these founders will often end up funding their new-found hobby with their salaries for a long period of time, instead of the typical “scale fast, fail fast” mentality. Finally, hobby entrepreneurs are often not driven by an intrinsic desire to solve a problem of their own. While there’s nothing inherently wrong about solving the problems of other’s, you’ll find it hard to ever fully understand your customers without being one of them.
There are several dangers in hobby-entrepreneurship that will prevent you from achieving success if you’re not aware of them. Let’s lay them out in the open:
Mental switching costs
Perhaps the most obvious peril is divided focus. When you have to bounce several tasks and thoughts in your head and switch focus from one thing to another, it takes our brains a while to be on track again. In psychology this phenomena is called task switching cost. It’s calculated by taking the difference in accuracy and performance between task repeat and task switch. For example, if you’re doing a case study for university and a new marketing campaign for your startup at the same time, it’s very likely that both will end up worse. See here for scientific details.
Lack of support network
A support of a great network has long been a cornerstone of a successful startup. Potential partners, first customers, advisers and other important stakeholders are often found in the network periphery of the founder(s). A part-time entrepreneur is inherently disadvantaged by lack of time or energy to go to the necessary events, meet the industry players, and contribute to the field by helping others. You can only give from your surplus. Hence, regardless of your generosity you won’t be able to give back if your schedule is filled with study/work.
No mentorship or funding
Especially younger entrepreneurs can benefit massively through advice and guidance from an experienced mentor. However, if you’re only half heartedly involved in your own venture, why would anyone else get involved either? There’s plenty of others to help, who are committed and ready to implement the action points discussed together. This point is even more relevant with early investors. I certainly wouldn’t invest my money in founders that are not 100% committed in what they’re doing. Perhaps the biggest harm with lack of mentorship and investors is through not getting accountability. Humans are generally lazy creatures and it’s been proved in many studies that being accountable to others can have a major impact on your productivity, creativity and commitment.
In the end, arguably the biggest peril in part-time entrepreneurship is lack of commitment. By not plunging into the deep end of the pool you start avoiding risks, which slows your personal growth. According to psychology research having a safety net can have very detrimental results. If we feel that failure won’t really harm us in any way, our most powerful mechanisms – survival instincts – will never kick in. Do you remember the story of Spanish conquistador Cortés? He created a point-of-no-return for his soldiers landing in Mexico by burning all their ships. The only way was forward and failure meant death. While we might not want to go this far in entrepreneurship, it’s very possible to “burn the bridges” by telling everyone around us what we’re going after, quitting our job, placing a bet, or anything that will make you avoid failing. Fear of not being to help your customers, of being laughed at, of financial bankruptcy, or fear of ego damage can be of different effectiveness depending on your own situation. While fear of failure can be a huge block in a society for ever taking risks and becoming an entrepreneur, we can take advantage of it once you’ve already taken the biggest risk of all – starting up. As they say in poker, go all-in.
If you don’t, somebody else will.
Leave a Reply